We propose here to test the feasibility of a new approach of generating proteins with novel ligand-binding, protein-binding and enzymatic activities. These model experiments, if successful, will open the way for a variety of applications in which this technology is used for production of new pharmaceuticals, diagnostic reagents and enzymes. We have developed a method for creating a library of E. coli cells expressing C-terminal fusions of random-sequence polypeptides with a small protein, thioredoxin. In this method, bacterial DNA is totally reshuffled by extensive digestion with restriction enzymes followed by ligation and then cloned downstream of the thioredoxin gene in the ThioFusion expression plasmid vector (Invitrogen). In our preliminary work, we have shown that the majority of these fusion proteins, even those with relatively large random-sequence components (more than 100 amino acid residues), remain soluble in the E. coil cytoplasm. They are apparently folded into compact molecules, and are resistant to intracellular proteases. In addition, their expression reaches very high levels (10 - 30% of total E. coil protein). In this project, we will create a library with the complexity of 106 - 10- independent clones, which approaches the complexity of the mammalian antibody repertoire (ca. 108). Considering that a number of specific ligand-binding, protein-binding and catalytic antibodies have been described, it is conceivable that our library will also contain a number of potentially functional proteins. We will use three simple and stringent selection schemes to select clones producing random-sequence proteins specifically binding antibiotics, the lac-repressor protein, or displaying a chemically simple phosphoserine phosphatase activity. The sequences of the random-sequence proteins produced in the selected clones will be determined and the proteins themselves will be purified, using thioredoxin as a vehicle for purification. Then we will determine if the purified proteins are indeed capable of the activities for which they were selected.